Political risks such as Brexit, US election cause drop in global M&A volume

Political risks scared companies off inking deals so far this year, according to Dealogic—except for Chinese and Japanese firms that hunted U.S. and European targets.

In the first nine months of 2016, global merger and acquisition (M&A) volumes slipped 22 percent on-year to $2.55 trillion, from $3.27 trillion in the same period last year, Dealogic revealed in a new report on Tuesday. This ended a three-year streak of on-year increases, the financial data platform said.

"The Brexit vote in June, a turbulent election cycle in the U.S. and a slump in equity capital raising globally have shadowed opportunities for companies considering acquisitions in 2016," Dealogic said.

U.S.

Domestic M&A volume tanked 38 percent to $771.3 billion, with fewer mega-deals across sectors. Abbott Laboratories' $30.6 billion bid for St Jude Medical in April was the largest domestic deal in 2016 so far, versus the eight deals that were each above the $30 billion mark in the same nine months of 2015.

Europe

All the largest European economies recorded year‐on‐year declines in M&A volume.